September-October 2024 Favorite Reads

90+% value comes from 10% of what we read. Here’s my favorites from September-October. 

Books 

1. The Order of Time by Carlo Rovelli
   • Summary
     • There is no such thing exactly as time and only our perception of the universe
       • Our memory of past and then present is what creates time
       • At fundamental levels, time does not exist
   • Notes
     • At a fundamental elementary level, time does not exist. It is particular to us and caused by memory
       • Time as we view it on earth does not extend to other planets in the universe. It is like a bubble around us (p 43)
       • Spacetime makes it so that there is not a common present
     • Best way to think of world isn’t as things, but as events and of change
       • Think of movement and dynamic changes and the relative changes between things is what causes our understanding of the world (p 97)
       • This builds to create a theory without time where everything just describes how things change in relation to each other (p 119)
     • Only having a blurred version of a macro reality is what causes us to see time (p 136). Blurring means we’re ignorant of the microscopic details of the world
     • Entropy and increasing entropy may be just a relative phenomenon and based on our perspective of it. This creates idea that the flow of time is just based on our particular view of the universe (146-150)
     • We view identity as 3 things
       1. Identifying a point of view
       2. Giving names to different entities (ex: these rocks = Mt Whitney)
       3. Memory of what happened previously. This is most important for humanity
     • Memory of the past and what used to be is what creates our identity and time. St Augustine refers to “it is within my mind that time is created” (p181)
     • Think of death as being full of days and a well earned rest (great note page 206)
2. George Marshall: Defender of the Republic by David L Roll
   • Summary
     • George Marshall is one of the most military generals + statesmen in US history
     • George Marshall did following
       1. Coordinated a key offensive in WW1
       2. Was Army Chief of Staff and arguably did the most to win WW2, 
       3. Set up the Marshall plan which helped get Europe back on its feat. This also led to the creation of the EU and NATO
       4. Helped keep the US out of a hot war when conflict broke out in Korea during the Cold War
     • Over time George Marshall was one of the only five-star generals ever and held the positions Army Chief of Staff, Secretary of State, and Secretary of Defense
   • Relevant Notes
     • Marshall became chief of staff right before WW2 and was in charge of taking a completely unprepared US army (roughly same standing army size as Portugal’s) and preparing it for WW2 (p 126). “By mid-1941 Marshall’s army would number 1.4M men – a remarkable rise from the total 189, 839 at the end of 1939” (p146)
     • Marshall advocated a Germany first (Europe first) strategic doctrine in WW2 which said the main approach must be to defeat Germany in Europe and anything distracting from this in other theaters (ie Japan) must come second (p 151). Marshall believed not focusing on cross-channel invasion of Germany first and instead going to North Africa in 1942 lengthened the war but he was overruled (p 268)
     • Marshall was the first to commit allies to unified command structure in each theater of war (p 197)
       • Marshall knew if he asked FDR to be Supreme commander of Allied Forces in Europe, FDR would give it to him, but he declined to do so because he didn’t think it was right and thus it went to Eisenhower (p 294)
       • Marshall and Ike were the main people coordinating the final battles over Churchill (and British) objections (p 340-341)
     • Marshall plan exported capitalism to protect the US at home (p 444)
       1. The Marshall plan wouldn’t have been possible without the support of Art Vandenburg as he was the main Republican senator who got it through Congress.
          • Per Marshall “we couldn’t have gotten much closer together unless I sat in Van’s lap or he sat in mine” (p456)
          • Vandenburg setting aside his presidential ambitions helped get this through in a bipartisan manner
       2. Marshall plan funds were made available to all European states, but Stalin wouldn’t let satellites accept them which delineated what was the western and eastern blocks (p 450)
       3. Total amount in Marshall plan was $13.2 Billion or 5.2% of GNP (p 478) and industry in Western Europe increased after it
       4. Marshall plan set the stage for creation of EU and NATO (p 479)
       5. The Vandenburg resolution in 1948 was the precursor to NATO. It was created for the defense of West Germany against the Russians (p 520)
       6. Marshall believed NATO was the military aspect and Marshall plan was economics. Both were needed to stop Russian influence (p 534)
     • Marshall was called out of retirement by Truman to be secretary of defense during the Korean war (p 562)
       • Marshall was instrumental for keeping Korea a limited proxy war (p 576)
       • Douglas McArthur’s desire to expand the war and his insubordination led to him being fired as he overstepped as a local commander (p 589)
     • Marshall received Nobel peace prize for his role as a soldier statesman (p 599)

Articles

1. Solar and batteries are helping Texas weather heat waves. Here’s how.
   • Texas hit peak demand on August 20th, 2024 and it was the highest ever energy demand day
   • However, because of solar being cheap on the grid, customers were barely impacted
     1. 
   • When sun went down, demand was still high though and had to turn on peak power from fossil fuels and then costs jumped up
   • Solar and the storage though are really what have kept everything in check for Texas consumers
     • Texas has increased its solar production from 13 GW to 21 GW and has roughly doubled its battery capacity over the past 12 months
     • In Texas, solar is just out competing the fossil fuels as it’s just been cheaper to deploy
2. Works in Progress: History is in the Making 
   • Argues that humanity’s view of history often focuses on political events (wars, revolutions, etc)
   • Instead, he argues that humanity changes more from things
     • There’s ideas (wealth of nations, Charles Darwin, etc)
     • Then there’s things (Boeing first 747 flight, first container ship, Model T, first contraceptive)
   • Argues that politics is downstream of these large changes so we shouldn’t focus on it as much. Then he uses examples of telegraphs/messages to make the point of how much of our life changed based on these events
   • His point is the making of things changes history more than anything else
3. Why 94% of China lives east of this line
   1. China is 18% of world’s population, but it’s almost all in eastern half of country
      • 94% lives on eastern half
      • Population density is massachusetts throughout
   2. East has rain, Yangtze and Yellow rivers, and flat plains making it great agricultural land
      1. West of line can be even more inhospitable than Saharan desert
      2. Himalayas block rainfall with Tibetan plateau, Taklamakan desert, and Gobi deserts behind it
      3. Huge temperature variation too because the deserts are so close to arctic and they can plummet in temperatures
   3. Tibet has 3rd largest amount of freshwater outside of Antarctica and Greenland because of glaciers which is why it’s so strategic
      1. Control of Tibet means controlling source of all freshwater
   4. The Chinese basins in east have historically been richer and protected by ocean on one side, but open to mountains to north
      1. This is where the Mongols, Huns, and others have raided over the years
      2. Other gap is the “hexi corridor” to the east which was the basis for the silk road
   5. Now the basin is an energy center
   6. Most of the ethnic minorities live to west of the Chinese area
   7. Weirdly China has only one time zone because Beijing only cares about the majority of people in the east
4. Howard Marks: Shall we repeal the laws of economics
   • Talks about how economics is about how we allocate finite resources, but in politics there’s no such thing as finiteness. In politics, politicians promise everything, but economic reality intervenes and often they can’t deliver
   • Uses example of North vs South Korea (now 2K vs 50K GDP) to make point of how capitalism won compared to a command economy
     • Believes US has thrived because of our embrace of capitalism
     • Incentives in capitalism enable free markets to allocate resources effectively
   • Uses multiple examples to defend against price gouging and really says supply/demand determines everything
     1. Example of how people get upset about expensive concert tickets, but if everyone will go to concert at that price then it’s nothing but supply meeting demand at that price
     2. If Uber charges surge pricing, then it’ll also need drivers to drive then and it makes sense
     3. Point is that if the government puts its scale on the thumb for either side then it distorts the free market and messes everything up
   • Price controls don’t work because sellers just can’t sell them below cost and then goods stop getting made “economist’s adage that “the best solution for high prices is high prices.” This isn’t a joke; far from it. In general, high prices mean demand is strong relative to supply. Eventually, those high prices will encourage producers to produce more and consumers to consume less, and the depressant impact on prices from both directions is obvious. We see this all the time in the oil market, for just one example.”
   • Goes on about how rent control is another distortion that makes no sense
     1. Requiring affordable housing, limiting rent increases, and maximum allowable rent are all forms of rent control distorting markets
     2. Crazy stat “ Many landlords do not fill their vacant rent stabilized units, as the operational and renovation costs may exceed the legal maximum rent. As of 2022, there are roughly 20,000 vacant rent stabilized apartments in New York City. (Wikipedia)”
     3. As mentioned earlier with regard to prices in general, if demand for apartments is strong and supply is restricted, the result should be rents that rise, encouraging landlords to add to supply. But market forces aren’t allowed to freely function in New York City; the laws of economics have been blunted by regulation
     4. High prices for apartments should incentivize builders to build more apartments which will solve problems of high rents
     5. On rent control “What it means in purely economic terms is that some people who couldn’t afford to live in New York City if rents were set by free-market forces are able to live there if they’re lucky enough to secure an apartment with regulated rent. But other people who would like to live in New York City and can afford higher rents can’t do so because there are no apartments for them”
   • Thoughts on various policies
     1. If Kamala gives $25K to new home buyers, it’ll just cause price of homes to increase
     2. Donald Trump tariff may cause there to be less imports, but will just result in higher prices and inflation
     3. California $20 minimum wage law for restaurants has just led to higher prices or stores closing because they can’t pay workers that much
     4. Social security is unsustainable though neither party will touch it. Levers are “There are many levers that could be pulled to restore Social Security to health, but nobody wants to pull them, since doing so would displease someone (that is, displease some voters). The options include (a) raising the Social Security tax rate, (b) raising the ceiling on the earnings on which tax is paid, (c) reducing benefits, (d) limiting cost-of-living adjustments, (e) raising the retirement age, (f) limiting the number of years for which retirees can collect, and (g) means testing would-be recipients. None of these is considered acceptable. Everyone just wants their checks as promised.”
   • Says US running a budget deficit is irresponsible
     • “The U.S. acts as if it has a credit card with no limit on the balance and no requirement to pay it down. It does so because it’s been able to get away with it thus far, and our governing officials lack the will to spend less than they can.”
     • Thinks there’s no way you can run deficits endlessly without consequences that’ll emerge
   • Free markets are rarely allowed to run by politicians and often they are populist and pick winners (ex: unions/workers) while ignoring why something takes place.
     • “Fundamentally, government subsidies and economic regulations amount to encouraging actions that people wouldn’t take on their own. In other words, these actions wouldn’t happen in a free market. Mandates like these should be examined critically. Some may stem from officials’ Solomonic decisions and desire for a fair society. Others are probably the result of a philosophic bias in favor of redistribution. And still others are just a matter of currying favor with voters.”
   • Governments are able to be run poorly because they don’t focus on profit
     • “Governments don’t strive for profits, meaning the people who run governments get a free pass on efficiency. Corporate management teams that fail to produce a product worth more than the inputs – aka make a profit – won’t last long. But governments aren’t expected to do so, and as a result, there’s no easy yardstick for quantifying a government’s effectiveness, like profits do for a business.”
   • It must be acknowledged that each step governments take counteracts what the market would do otherwise
   • Incentives and free markets are essential for a high-functioning economy, but their existence assures that some members of the economy will do better than others. You can’t have one without the other.
     • Inequality is the price you pay for having effective economy and markets improving over time
     • Chinese growth is actually almost entirely due to its free market
       • China’s private sector is often summed up with a combination of four numbers: 60/70/80/90. Private firms contribute 60% of China’s GDP, 70% of its innovative capacity, 80% of its urban employment and 90% of new jobs.
       • Command economies are failures and the book animal farm does a great job illustrating this
5. Our World in Data: What are the safest and cleanest sources of energy?
   • Nuclear energy is actually the cleanest source of power
   • Nuclear and renewables are just way way cleaner and safer
     1. 
6. Astral Codex Ten: How the War was Won
   • Challenges multiple narratives of world war 2 where it focuses on battles
   • Effectively argues that production of naval and air power was what was most important throughout war and that’s the key was the equipment that made this war machine possible
   • Interesting points he makes
     1. Battles aren’t as important as you think because they didn’t knock many tanks/planes out. Additionally if you’re planning a battle is the hardest way to knock out enemy capacity
        • Looking at the Kursk battle, the Germans lost a manageable amount of equipment. If the largest battle ever didn’t knock out equipment, then no battles ever would
     2. Allied powers won because of their ability to produce more air and sea power
        • American productive capacity was particularly high
        • Argues various things Axis powers did actually reduced their ability to fight the war
     3. Japan was way more powerful than people think and had the industrial base the size of the Soviet Union
   • Argues that strategic bombing only important for knocking away fuel and equipment
     1. This is what stops opponents from fighting the war
     2. Argues that bombing cities was immoral as you were killing lives for no reason as it didn’t help your objectives in the war. Says LeMay’s firebombing in Tokyo was pointless and killed people for no reason
     3. Makes side note point that MacCarthur was a disastrous general because he fought in the Philippines in December 1944-1945 which was some of most deadly in whole war
        • The Americans took more than 220,000 casualties, the Japanese 430,000. Estimates vary on Filipino civilian deaths, but 750,000 is a credible middle of the road estimate.
        • This fighting was entirely pointless because America already had a toehold on the islands, could have ignored these Japanese troops as they’d cut off their supply lines, and this fight killed many people without actually doing anything
     4. Interesting points in future is that battles are less important and productive capacity is key
        • Argues this is why the Taliban beat US in Afghanistan because nothing US did stopped their productive capabilities
        • “Germany, Japan, the United Kingdom (including the British Empire), and the United States all devoted between 65 and 80 percent of their economic output to the making and arming of aircraft, naval vessels, and anti-aircraft equipment.”
     5. Scott Alexander calls out important caveats that battles can still be big
        • Japan surrendered because of atomic bombs
        • France caved after losing a few key battles
7. Mihir A. Desai: The Trouble with Optionality
   • Talks about how students who go into Finance/business optionality in all aspects of life can be a negative thing
     • Marriage becomes “the death of optionality” even though it’s a beautiful thing
     • Serial optionality means you won’t take risks on sticking it out with a job or people
   • “The shortest distance between two points is reliably a straight line. If your dreams are apparent to you, pursue them. Creating optionality and buying lottery tickets are not way stations on the road to pursuing your dreamy outcomes. They are dangerous diversions that will change you.”
8. Noah Smith: How will you save small midwestern towns without mass immigration?
   1. Starts with two immigration perspective
      1. Americans support high skill immigration
      2. Americans are generally against illegal immigration
   2. In Between is mass low skilled immigrants
      1. Often these immigrants will go to a specific area (ex: small town in Maine) because:
         1. If lots of Somalis are there then they tell their Somali friends
         2. Because there’s jobs at factories and other things that aren’t being filled as young Americans move towards bigger cities
      2. Only an immigrant is going to go to a meatpacking plant in a small town in the US and think its the best thing around
   3. Many rural and small towns are drying up and dying now
      1. His point is without these immigrants coming to these areas it’s going to be even worse
      2. Example of Haitians in Springfield shows how population in Springfield has decreased over recent years and would be way worse without immigrants
   4. Apparently migration to specific areas is similar to what used to happen in US (think of Nords in Minnesota)
   5. The traditional response to migration is “She finds the same old American story: initial wariness and even some hostility to the newcomers, followed by broad acceptance and tolerance as locals get to know the newcomers”
9. John Gardener: The Road to Self-Renewal
   • From a 1990 speech to McKinsey
   • “We have to face the fact that most men and women out there in the world of work are more stale than they know, more bored than they would care to admit. Boredom is the secret ailment of large-scale organizations”
   • Be aware of dangers of stopping growing and getting stuck
   • “There’s a myth that learning is for young people. But as the proverb says, “It’s what you learn after you know it all that counts.” The middle years are great, great learning years. Even the years past the middle years. I took on a new job after my 77th birthday — and I’m still learning.”
   • We create our own environments so beware of the impact you have on others
   • Failures are part of the story
     • “Of course failures are a part of the story too. Everyone fails, Joe Louis said “Everyone has to figure to get beat some time.” The question isn’t did you fail but did you pick yourself up and move ahead? And there is one other little question: ‘Did you collaborate in your own defeat?” A lot of people do. Learn not to.”
   • “Life is an endless unfolding, and if we wish it to be, an endless process of self-discovery, an endless and unpredictable dialogue between our own potentialities and the life situations in which we find ourselves. “
   • “There’s something I know about you that you may or may not know about yourself. You have within you more resources of energy than have ever been tapped, more talent than has ever been exploited, more strength than has ever been tested, more to give than you have ever given.”
     • You have so much more in yourself than you ever imagine
   • You also build your own meaning
     • “In the stable periods of history, meaning was supplied in the context of a coherent communities and traditionally prescribed patterns of culture. Today you can’t count on any such heritage. You have to build meaning into your life, and you build it through your commitments — whether to your religion, to an ethical order as you conceive it, to your life’s work, to loved ones, to your fellow humans. Young people run around searching for identity, but it isn’t handed out free any more — not in this transient, rootless, pluralistic society. Your identity is what you’ve committed yourself to.”
   • Be an optimist but realize it’ll be tough
     • We cannot dream of a Utopia in which all arrangements are ideal and everyone is flawless. Life is tumultuous — an endless losing and regaining of balance, a continuous struggle, never an assured victory.
     • Nothing is ever finally safe. Every important battle is fought and re-fought. We need to develop a resilient, indomitable morale that enables us to face those realities and still strive with every ounce of energy to prevail. You may wonder if such a struggle — endless and of uncertain outcome — isn’t more than humans can bear. But all of history suggests that the human spirit is well fitted to cope with just that kind of world.
   • “Meaning is not something you stumble across, like the answer to a riddle or the prize in a treasure hunt. Meaning is something you build into your life. You build it out of your own past, out of your affections and loyalties, out of the experience of humankind as it is passed on to you, out of your own talent and understanding, out of the things you believe in, out of the things and people you love, out of the values for which you are willing to sacrifice something. The ingredients are there. You are the only one who can put them together into that unique pattern that will be your life. Let it be a life that has dignity and meaning for you. If it does, then the particular balance of success or failure is of less account.”
10. Morgan Housel: Cumulative vs. Cyclical Knowledge
    • Morgan talks about how James Garfield died in 1881 because his doctors didn’t believe in germ theory
    • Then he compares to money where he lists multiple examples of how very little has changed (ex: Benjamin Roth in Great Depression)
      • “Reading old finance articles makes you feel like the ancient past was no different than today – the opposite feeling you get reading old medical commentary.”
    • Knowledge in some fields is cumulative. In other fields it’s cyclical (at best).
      • Great Feynman quote about “Imagine how much harder physics would be if electrons had feelings.” Well, people do. So any topic guided by behavior – money, philosophy, relationships, etc. – can’t be solved with a formula like physics and math”
    • Cyclical Knowledge means you have to accept more volatility in money and markets than you would in other fields
11. Why Does Seattle not have Snow but Boston does?
    • There are 3 important influences on temperature
      1. Latitude – closer to equator is warmer
      2. Elevation – higher elevations are cooler
      3. Continental vs maritime climates
    • Continental climates take place where there is a large land mass. They have extreme variation throughout year (low lows and high highs)
    • Maritime climates are nearby bodies of water
      • Much less extreme
      • Influenced by the body of water
    • Compares Seattle, Fargo, and Boston
      1. Seattle has highest low (16F record low and lowest high 96F)
      2. Fargo has lowest low (-48F record low and highest high 114F)
      3. Boston is in between (-30F record low and highest high 104F)
    • Continents behave like sand on a beach
      • It heats up really quickly when there’s heat and then temperature drops like crazy when it falls
      • On the other hand, water and oceans moderate all temperature changes
    • In Fargo, the air is far enough away from Pacific that there’s no moderating impact
      1. Fargo and the Midwest have continental climates
      2. All of US west coast has maritime climates
      3. East coast cities experience more of a continental climate because the wind in US flows from east to west
         • This means they don’t get the moderated impact of maritime climate from ocean
         • That’s why everywhere on west coast has a more moderate climate than the eastern seaboard
12. Stratechery: Elon Dreams and Bitter Lessons
    • The reason SpaceX has so many more launches than everyone else is because it’s cheap
      1. It’s cheap because it’s reusable
      2. It’s really as simple as that
    • Similarly if Starship can keep up launches and keep dropping price, will launch Starlink with bigger satellites too and dramatically improve that product
    • Then makes comparison of Tesla to Waymo
      1. Waymo is farther along in the journey than Tesla (it’s at higher level of autonomy) but everything is expensive ($200K today)
      2. Tesla is just trying to drive down cost to $30K for robotaxi and whole product roadmap is just to reduce the cost as much as possible
         • Because of this, they removed Lidar and only focus on cameras
         • Focuses on true carfree robotaxi dream
    • Tesla and SpaceX are really focused on a dream of something and then reducing costs as much as possible to bring it about
    • Goes through a bit more detail on Tesla compared to Waymo too
      • Karpathy (who used to work at Tesla) basically argues that Tesla has a software problem since it’s deployed everywhere and Waymo has a hardware problem and that Tesla’s problem is easier
      • Tesla is effectively trying to build out a model similar to an LLM where it’s just letting a computer do everything
        • We’ve seen with chess and LLMs that this is actually better than humans trying to input information into machine
        • The bet is this will be true for self driving too, but we’ll see how that works out
13. Howard Marks: Ruminating on Asset Allocation
    • Aggregation of a lot of thoughts on assets
    • Counter conventional idea that “at bottom, there are only two asset classes: ownership and debt”
      1. Ownership put money at risk and acquire portion of asset with hope of return
      2. With debt, The relationship between borrower and lender is contractual
    • Believes biggest asset allocation decision is how aggressive or conservative your approach is
      • The absolute risk level must be consciously targeted. In fact, in my view, it’s the most important thing. For an investment program to be successful, the level of risk in the portfolio must be well compensated and fall within the desired range . . . neither too much nor too little.
    • He says offense is generally played with equity
      • Compares 2009-2021 markets vs today and argues that debt is actually better positioned today than it was previously
      • Love how he displays how your potential outcomes widen as you go up the risk curve
        1. 
    • Then he thinks about combinations you can make for debt vs equity
    • Ownership assets and debt should be combined to get to the right ratio for you and everything else is basically gravy
    • Ends with saying with debt returns at 7-10% now people should really increase their overall investments into it